Monday, May 02, 2005

Excuse the boring, put-upon-middle-class tone of this post, but...

Is it my imagination, or have things in New Zealand got much more expensive while I was away?

I'd already thought I detected about a 20% increase in average rents when I was looking for flats. I know there's been a property price "boom" and I assumed that was the explanation. Though it was also possible that arriving just after the peak rush for rented accommodation - the start of the university year and new employment contracts - all the best deals were gone.

Recently I've also been taken aback by the cost of groceries. It seems that it's costing me $15-20 for a couple of meals' worth of goods. This is a supposed fruit and vegetable-producing country, which trades freely with another nearby one (Australia), yet almost all the fresh stuff at the supermarket is prohibitively priced. $8.00 a kilo for peppers! $3.75 for a single avocado! $6.00 for a small bag of kumara! Not to mention things which don't look particularly exotic, but have apparently now moved into that class, such as asparagus (currently $19.90/kilo) and eggplant ($12.00/kilo).

I've considered the possibility that I live in an expensive area in an expensive city and shop at an expensive supermarket. For prices, New World Thorndon may even shade its compatriot New World Wakefield St (Mt Vic/Oriental Bay), which even in 2003 was known affectionately as "the most expensive supermarket in the world". But anecdotal reporting (i.e. my flatmate) suggests that in rural towns such as Greymouth and Palmerston North prices are even higher.

And I've now collected documentary evidence. A pint of Speights at the Backbencher was $4.00 before I left; now it's $5.00. An espresso coffee had a base price of $2.50. Now it's $3.00 across the board. Returning to the vegetable bins at Thorndon New World, in the corner directly opposite the main entrance there are still helpfully chopped-up "heads" of broccoli (the right size for single, urban people). I recall clearly that they used to be $1.99; now they're $2.25.

Has there really been 12-25% inflation in the year I've been away? I've factored in the possibility of higher oil prices knocking up transport costs - but what about the New Zealand dollar, which has got steadily stronger? It was always used as an excuse for higher fuel prices when it was weak; shouldn't the converse be true now?

There's the fact that I've missed a performance review round and any possible salary increment. But I still earn a decent wage, and have no major responsibilities apart from chipping away at my student loan and trying to start saving again. I wonder what those people who have kids or a mortgage (a first one, rather than a speculative second or third) think of things at the moment? Certainly, maintaing a healthy, varied diet, which we're all encouraged to do, could be one of the things to get squeezed out. You'd have to cook pretty plainly, or with innovation, to beat the $4.00 it costs (even in Thorndon) for a fish and a scoop of chips.

And it's not that I've just been in South America. When I stayed in London recently, I thought that food and groceries were surprisingly affordable. Simon and Jill confirm that they are significantly cheaper than in New Zealand, especially when purchasing power parity is accounted for. Something has changed there - when I lived in London in the late 90s it still seemed more expensive than NZ. I can recall laughing at the 30p it cost per apple in Sainsburys (Cromwell Rd), when you could get a 2-kilo box of apples at the orchard gate in NZ for the equivalent of 30p.

When I went from London to the U.S. in 1999, the lower cost of living was striking. I shared an apartment in South Beach, Miami, with Cecilia and an Australian guy called Todd, and we shopped at the supermarket down the road. For a collective $100 we packed our fridge to bursting point with (among other things) beer, ice cream and legs of meat. We (mainly Todd, actually) cooked sumptous dinners and stuffed ourselves, having to lie down afterwards, perspiring quietly in the South Florida heat.

As a country, New Zealand is obviously never going to be as rich as the U.S. , and we can't afford to pay our farmers huge subsidies to keep prices at rock-bottom. But in a primarily agricultural nation, the question of why basic goods are so expensive warrants further investigation. You also have to start questioning the value of so-called economic growth based on inflated house prices, when its chief effect is to raise living costs for the average person.

10 comments:

sophia
said...

I have some explanation for this as regards food. Asparagus is about as out of season as it can get - at its peak it is dirt cheap. Same goes for avocado - a few months ago they were 4 for a dollar and that's in chilly Christchurch. Go seasonal and if possible to a fruit and vege shop. Supermarkets lose money on their low prices for stuff like toilet paper and specials. They recoup it on fruit, vegetables and meat.

ok, I'm ignorant - when is asparagus in season? One I didn't mention is green beans, which are at $10.00/kilo. What about Australia? Shouldn't we be able to get NZ out-of-season stuff from there without breaking the bank?

Well, just to add my two cents: An hour ago I just bought five NZ kiwifruit for $1 at the supermarket across from my apartment in Gainesville. So if kiwifruit are costing more in Wellington, then it's definitely some kind of crazy conspiracy to keep the masses down...

Seriously, aside from US grown produce being cheap because of farm subsidies, imported stuff is usually pretty cheap here too. Lots of stuff from Chile, it seems, so I can't see why stuff from Australia shouldn't be readily and cheaply available in NZ. An avocado from Chile has to travel further to get to Florida than an avocado from Australia to NZ.

hmmm, well, kiwifruit at Thorndon NW are about $5.00/kilo, from memory. At current exchange rates, that's not far off $4.00 USD. Five fruit would be about 500-600g, right?. So you're getting a price of around $2.00/kilo - half price! That's if you're sure they're from NZ and not from Chile or California.

This seems to have touched a nerve and a lot of it is true. It's no secret that we get the second grade stuff here so that the best can get exported. We only get it at the end of the season if it hasn't been sold and is past its best by then. But shopping for the seasonal produce is definitely the best bet. You should be buying carrots, pumpkin, squash, parsnips at the moment and apples and pears for the best buy. Yes, I know that doesn't explain the broccoli which should be in season and the kumara which gets harvested in February. Peppers seem to be expensive all year round which is a disgrace. Fruit & vege shops or growers markets are best - if you can get to one. Asparagus is cheap in spring, beans in summer, ditto avocados. Our meat is still way cheaper than the US though.

ok, I may have exaggerated with the kiwifruit. They're $3.00 NZD/kilo, which means that they're only slightly more expensive than in Gainesville, FL. But a work colleague has just informed me that he is getting stacks of organic avocados from a grower in Gisborne for $1.00 each. Apparently, when just perfectly ripe, avocados will keep for some time in the fridge. I've signed up for supplies.

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